(CNS Business): Three new pieces of legislation are expected to be gazetted this week, paving the way for the Cayman Islands to create a platform whereby relevant authorities in other countries can access information on beneficial owners of companies and other financial entities registered here. The publication of the laws will open another 21-day window for comment from the public or the industry before the legislation goes to the Legislative Assembly.
Following the initial public consultation on the main piece of legislation, the Companies (Amendment) Bill 2017, Financial Services Minister Wayne Panton is encouraging all business owners to provide input on the final drafts.
“The planned amendments facilitate an information exchange arrangement with the UK for beneficial ownership information. They are in line with the agreements made between the UK and all of its Overseas Territories and Crown Dependencies,” Panton said.
He explained that the platform would enhance Cayman’s already strong regime of exchanging information with law, regulatory and tax authorities in jurisdictions where Cayman has legal arrangements.
“This is not an attempt to introduce a public or central register of beneficial ownership information,” the minister stressed, as the industry remains deeply concerned about such a possibility.
“Currently, fewer than a dozen countries around the world have introduced or plan to introduce public registers,” Panton said. “Cayman is not one of those countries, and we will not do so until this is the accepted and implemented international standard. We do, however, recognise that there has been a strong push globally for greater transparency and information exchange, and that Cayman must act in order to protect our reputation as a leading international financial centre.”
The initial consultation period, which ended on 9 December, was intended to identify any major areas of concern with the draft bill. A revised Companies (Amendment) Bill, 2017, as well as the Limited Liability Companies (Amendment) Bill, 2017 and the Companies (Amendment) Bill, 2017 will be gazetted this week. This will trigger the second public consultation period of 21 days, in accordance with the Constitution.
Panton explained that the legislative amendments stem from discussions between Cayman and the UK about enhancing the exchange of information arrangements between the two countries’ tax, regulatory and legal authorities.
“The conversation began in earnest in June 2013, with the UK’s chairing of the G8 Summit,” he said. “That’s when Cayman – as well as the other UK crown dependencies and overseas territories – agreed with the UK to assess if establishing central registers of the natural persons who ultimately have beneficial ownership and control of companies would enhance domestic legal compliance, and also allow easier access to this information by authorities in the jurisdictions with which the CDs and OTs have legal agreements to exchange information.”
The new legislation is part of that agreement and it emerged from a public consultation on beneficial ownership of registered companies in late 2013. Findings, which were published in December 2014, were that the strength of our current regime, which collects, maintains and updates beneficial ownership information through our licensed and regulated corporate service providers (CSPs), was an appropriate and preferred system that complies with international standards.
To enhance the current system, the financial services ministry and Cayman Finance developed the concept of a centralised platform, which was validated by the UK last year and accepted as “similarly effective” to the original idea of a central register.
Cayman signed an exchange of notes in April with the UK to implement the platform and augment the sharing of beneficial ownership information. Once approved by the Legislative Assembly, the new bills will provide the framework for the platform to be working by the end of June next year.